Up next for the FCC: Space communications
By: Brooks Boliek
November 29, 2012 11:16 PM EST

Federal Communications Commission Chairman Julius Genachowski’s office is decorated with equipment from long-dead technologies — such as line-testing gizmos that date from the rotary phone era — but he’s got an answer for critics who suggest communications regulation is a thing of the past: Space is the next frontier.

Genachowski has spent the better part of his four years as chairman battling telephone and cable companies and GOP lawmakers as they tried to roll back regulations, but as he brushes off talk of an imminent departure, he told POLITICO that the FCC has a new mission: helping set a framework for commercial communications in space.

Last year, SpaceX began launching rockets under a temporary FCC license to use federal airwaves. “You need spectrum to control the rocket,” Genachowski explained, adding that rockets contain sensors that communicate to Earth and radar to determine location. Spectrum has other uses, too. “You need a self-destruct button,” he added.

Next to NASA, Genachowski has headed one of the most tech-heavy agencies under President Barack Obama, and although he won’t discuss his immediate plans, there’s talk he’s unlikely to remain for a second term. During Obama’s first term, Genachowski used his private-sector experience to tackle some of the most difficult telecom debates in decades — adopting a national strategy for broadband Internet rollout, reforming subsidies for the needy to include Internet and mobile phones and making TV stations post online how much politicians pay to advertise.

Genachowski also intervened in epic disputes among industry segments, seeking to keep networks open and encourage innovation but not always earning supporters along the way. Web companies, such as Google, were fearful that broadband services would discriminate, so Genachowski ushered in the net neutrality rules that require all Internet traffic to be treated equally. Wireless companies were clamoring for more airwaves, so Genachowski pushed a plan to incentivize TV stations into selling their airwaves and receiving part of the proceeds from public auctions.

All the while, the chairman has been grappling with a growing move by telecoms such as AT&T and Verizon to undo regulations that date to Alexander Graham Bell’s technology and question the very need for the FCC.

Verizon went to court to complain that the commission overstepped its authority with net neutrality. The company’s argument that it has “a right to decide what they transmit online and that those business decisions are tantamount to speech deserving First Amendment protection” is worrisome to the FCC as it could undermine the commission’s authority to make many decisions. That case is expected to go to trial in 2013.

AT&T is taking a different approach, announcing a $14 billion plan to transition to an all IP-based fiber network from its old copper wire-based facilities. The regulatory implications are clear: AT&T would create a regulation-free service and not be subject to rules that require the company to continue costly investments in its traditional copper networks.

“The robust and vibrant debate comes with the job,” Genachowski said. “There’s a lot at stake. People have strong opinions. Having been in this space before, it wasn’t a surprise. What I learn from watching this space is that the only option is to try to do the best thing for the country and to feel good about it.”

When Genachowski became the commission’s 30th chairman in 2009, he was swept in on the same wave of “hope and change” as Obama.

Genachowski, the son of Polish immigrants, cut his teeth in politics serving on the Iran-Contra Committee and later became a senior staffer at the FCC under Bill Clinton’s chairman, Reed Hundt. He also served as an executive of Barry Diller’s IAC Corp.

Liberals across the technology landscape were thrilled that they were getting one of their own in Genachowski — a leftist technocrat who could undo the damage caused by George W. Bush’s two terms.

They waited for Genachowski to make a bold move, and then they waited some more.

“I would look at it through a lens of missed opportunity,” said Joel Kelsey, legislative director at Free Press. “He turned the leadership of the agency into a place where the companies they are supposed to regulate have become the constituents to appease, and the consumers they are supposed to protect are thought of very little. The standard that people should hold him to is what would be possible for an FCC chairman coming into office when the president has won a landslide and there is a 60-vote majority in the Senate and an overwhelming majority in the House, and that litmus test is pretty high.”

Harold Feld, senior vice president of the public interest group Public Knowledge, has moderated his view. “He’s found a style of leadership that fits him,” he said. “It isn’t the confrontational, get-things-done style we were looking for, but it isn’t a total rollover.”

When asked to describe his crowning achievement in office, Genachowski doesn’t miss a beat. “If I had to summarize it in one word, it would be: broadband.”

In the past two years, the FCC implemented the National Broadband Plan, which seeks to extend high-speed Internet to all Americans and brought the Universal Service Fund program into the 21st century by subsidizing broadband, not just voice service, to the needy and the hard to reach.

Although he made the first significant reforms to the Universal Service program since its inception, one former FCC official now in the private sector said the FCC “ended up giving an enormous gift to AT&T and Verizon and [did] nothing to build out rural broadband.”

AT&T executives chuckle at the suggestion that the Genachowski-led FCC is a rubber stamp. Just look at how he put a stake through their attempt to buy T-Mobile, they say.

“Most of the people who have dealt with USF have dealt with it by ignoring it,” said Robert Quinn, the company’s senior regulatory vice president. “He actually went out and did something about it.”

The National Broadband Plan, the Universal Service and the inter-carrier compensation orders recognized for the first time where the national communications infrastructure is going, and it’s not going back to copper wires and circuit switches, Quinn explained.

Genachowski said the steps he took were necessary to wring out corruption in a system that over the years became a blank check for telecom carriers while at the same time moving it into the broadband age.

Genachowski acts like someone who knows that the clock is ticking. In a two-week period, he pushed proposals for new rules on media ownership, prison telephone charges, stolen cellphones and to allow DISH Network to become a wireless phone company. Other votes are circulating on the critical special access services market, text-to-911 service and media ownership restrictions.

Two of the cornerstones of the Genachowski legacy at the FCC are still untested.

It’s still unclear how many TV stations will participate in the incentive auction that will pay them to move off their frequencies. Broadcasters have complained that in order to get the auction off the ground, Genachowski singled them out for tough regulatory treatment, such as the decision to require them to place their “political file” of advertising data online.

Genachowski doesn’t see it that way, pitching the plan as an opportunity for the struggling stations.

“Broadcasting now is a tale of two cities,” he said. “If you look in any market now, there are broadcasters that are very, very strong ones that are doing great, better than they have ever done, and then there are weak ones that are challenged.”

If Genachowski’s policy successes are still a work in progress, his attempt to turn frequencies used for satellite communications into a wireless service known as LightSquared is a black eye. Backed by investment banker Philip Falcone, LightSquared has resulted in a lingering policy hangover.

“If anything, the shadows around the LightSquared project should have led the Federal Communications Commission to proceed with caution rather than step on the gas,” Sen. Chuck Grassley (R-Iowa) said a few months ago. “The opposite happened, and the FCC needs to be held accountable.”

Genachowski said the commission knew there was some risk involved but that the technology will eventually prevail.

“I’ve been very focused on freeing up every megahertz of spectrum out there for mobile broadband, and it’s very clear that we need to remove unnecessary regulatory barriers like the ones that limit the use of spectrum to satellite,” he said.

The net neutrality rules got a rebuke from the House GOP, but the Senate didn’t follow suit. The “smart money” is betting that the rules get tossed out in court because of the legal foundation upon which they rest.

Genachowski doesn’t buy that, and in the meantime, he said the rules are becoming the new normal, having been baked into merger deals such as Comcast-NBC Universal.

There’s still a lot of ground for the FCC to cover, Genachowski said, such as communication rules for space. “If you’re launching the rocket and there’s interference — that wouldn’t be good,” he said. “There are a lot of people who say a government agency would resist this, … but we leaned into it.”